A child is promised to be given by his mother Ᵽ 5000.00 7.5 years from today. The interest rate is 7.25%. What is the present value of the amount?What is the present value of a 15 year investment amounting to Ᵽ 45,670 if the prevailing interest is 2.5%?Based on Item No. 2 compute for the present value of Ᵽ 45,670 in 20, 22 and 25 years if the interest rates are 5.5%, 6.8% and 9.80% respectively.

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A child is promised to be given by his mother Ᵽ 5000.00 7.5 years from today. The interest rate is 7.25%. What is the present value of the amount?
What is the present value of a 15 year investment amounting to Ᵽ 45,670 if the prevailing interest is 2.5%?
Based on Item No. 2 compute for the present value of Ᵽ 45,670 in 20, 22 and 25 years if the interest rates are 5.5%, 6.8% and 9.80% respectively.

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